Termination of Lease Agreements for Residential and Roofed Business Premises by Lessor’s Notification

Lease agreements are regulated under the Fourth Section of the Turkish Code of Obligations (“TCO”) No. 6098, titled Lease Agreement, and are divided into three sub-sections: (i) General Provisions, (ii) Lease of Residential and Roofed Business Premises, and finally (iii) Usufructuary Leases. In this article, the lessor’s right of termination of lease agreements for residential and roofed business premises by notification regulated under Article 347 of TCO will be examined.Although the definitions of residence and roofed business premises are not given in the TCO, the doctrine defines them as follows:

  • Residence means a structure that meets the lessee’s accommodation and shelter needs and provides minimum protection against environmental effects,
  • Roofed business premise means a covered structure where commercial or industrial economic activities are carried out.

It should be noted that pursuant to the Article 339 of the TCO, the provisions specific to leases of residential and roofed business premises shall not apply to the leases of immovables for a period of six months or less, which, by their nature, are designated for temporary use.

The lessor’s rights to terminate the lease agreements for residential and roofed business premises are very limited. Leaving aside the cases where the lease agreement is terminated through a lawsuit, the only opportunity for the lessor to terminate the agreement due to the expiration of the lease period for residential and roofed business premises is Article 347 of the TCO. Within the scope of the relevant provision, the legislator has envisaged different regulations for fixed-term and indefinite-term agreements.

Fixed-term lease agreements for residential and roofed business premises shall be extended for one year with the same conditions unless the lessee gives notice of termination at least fifteen days before the end of the lease term. The fifteen-day period here is of a relative imperative nature and shorter periods may be agreed upon by the parties for the benefit of the lessee. The lessor, on the other hand, shall be able to terminate the agreement, only after the end of the ten-year extension period, provided that the lessor gives written notice at least three months before the end of each extension year following this period. It should be emphasized that the notice must be received by the lessee at least three months in advance.

The calculation of the period in which the lessor may exercise its right of termination is controversial in the doctrine. In accordance with the textual interpretation of the law, in order to minimize the risks that may be encountered in practice, it is preferred to calculate the extension period from the expiry date of the fixed-term lease agreement. In addition, by adding one “following year” to the end of the ten-year extension period, the date on which the lessor may exercise its right of termination can be calculated. In other words, the right of termination by the lessor can only be exercised by giving three months’ written notice before the end of [the duration of the lease agreement + ten-year extension period + one following year].

With regard to indefinite-term lease agreements for residential and roofed business premises, pursuant to Article 347/2 of the TCO, “… the lessee may always terminate the agreement, and the lessor, after ten years from the beginning of the lease, with a notice of termination in accordance with the general provisions.” It should be noted, here, unlike fixed-term agreements, the ten-year period shall run from the beginning of the lease agreement and the termination shall be made in accordance with Articles 328 and 329 of the TCO due to reference to the general provisions. It is again regulated that the termination notices of indefinite-term lease agreements for residential and roofed business premises shall be made in written form in accordance with Article 348 of TCO.

The content of this article does not constitute a legal opinion. Demircioğlu Koçak Bayraktar Attorney Partnership shall under no circumstance be held responsible for the content hereof. It is recommended for the readers to contact our team for detailed information and professional support regarding the content of this article.